First Mariner Bancorp, parent company of 1st Mariner Bank, said in a regulatory filing Thursday it is still short almost $38 million of the capital it needs to meet the terms set by state and national regulators.
The Baltimore-based company, which reported a net loss of $46.6 million in January for 2010, said in a filing with the Securities and Exchange Commission that its efforts to raise capital had fallen short. The company is operating under a 2009 agreement for a cease-and-desist order with the Federal Deposit Insurance Corp. and the Maryland Division of Financial Regulation.
A bank spokesman declined to comment on the filing.
“It’s the same old story, and it’s a question of how much longer will this misery continue,” said Bert Ely, a Virginia-based banking consultant. “They’re just kind of limping along at this point.”
According to terms mandated by federal regulators, First Mariner needed to raise its Tier 1 leverage and total risk-based capital ratios to 6.5 percent and 10 percent, respectively, by March 31, 2010 and to 7.5 percent and 11 percent, respectively, by June 30, 2010.
First Mariner has not met those deadlines and said in its latest filing that it remained in conversation with regulators about the situation. First Mariner said it needed at least $37.6 million more in capital to reach the levels set by regulators. In 2009, the company said it needed to raise $15 million to meet all of the requirements.
“They’re losing money, they’re bleeding to death,” Ely said. “The question is, when are regulators going to just take it over?”
In Thursday’s filing, First Mariner said that other than a possible future stock issuance, it did not have an immediate answer to regulators’ concerns about its capital reserves.
“First Mariner currently does not have any capital available to invest in the Bank and any further increases to our allowance for loan losses and operating losses would negatively impact our capital levels and make it more difficult to achieve the capital levels directed by the [Federal Deposit Insurance Corp.] and the Commissioner,” the company said in the filing.
The holding company, First Mariner Bancorp, is also under an order from the Federal Reserve Board to shore up its capital levels. At the holding company level, First Mariner is required to have consolidated Tier 1 capital to average quarterly assets and Tier 1 capital to risk-weighted assets ratios of 4 percent each and a total capital to risk-weighted assets ratio of 8 percent. Those capital ratios are now at 0.7 percent, 1 percent, and 2.1 percent respectively.
Prior to Thursday’s filing, filed after the markets closed, shares of First Mariner closed at 97 cents, after going above $1 at times throughout the day. The price and trade volume started rising Tuesday and over the last five days, shares of First Mariner jumped 67 percent.
In February, First Mariner Bancorp received a six-month extension to get its stock price above $1 per share after receiving approval to move trading from Nasdaq to the Nasdaq Capital Market. The company’s stock faces the threat of delisting otherwise.